100 mortgage london

100 mortgage london
As a commercial mortgage industry continues to suffer, and credit continues to tighten policy, entrepreneurs begin to focus more on the traditional SBA loan to expand its commercial mortgages. Many companies have shied from the owner of this stretch, especially from the poor Press, expensive fees, and guarantee or floating rate.

Much has changed and if the borrower should be aware that not all SBA lenders are the same, and that the SBA programs fill an important gap in the market which would otherwise be difficult to fill.

Benefits

Since the Small Business Administration essentially guaranteed a large portion of the loan, either 40% of the 504 or 75% for the 7a, many unique programs that can be offered. For example, 90% is fixed rate financing on purchases. Compare that to the typical bank loan, amounting to 75-70% loan to value and you can quickly benefit. 504-The program also offers some of the best prices in the industry and can be used with fixed periods of 5 -25 years.

For example, as of this writing (3/5/08) 6.5% on a market rate 504 is blended from 90% to $ 1,000,000 loan. A popular bank CMBS lenders, 90% (30 years) is around 7.25%.

The SBA 7a loan has many advantages, as well. 90% of the financing, the purchase and refinance, is acceptable. The borrower can predictions about its finances, which is a way to close a loan when the current debt coverage ratios are too low. Or in other ways, if the company did not show enough income to qualify, they can be projected, higher income, the number of work. This is quite unique in the chamber to the SBA.

Basically, the SBA loans fill an important gap in the market that the banks would not be able, as the risk to be filled.

Negative

The SBA loans are only available for owner occupants. Or more accurately, the company at least 51% of the building. The 7a has a lot of leeway, because the rate typically hovers over primes, and adjust once per quarter (we are working with a bank, a 5-year fixed-7a), which is a pretty scary situation for all. The warranty is also difficult to swallow. It is 2.75% to 75% of the loan amount, which adds up very quickly (we are working with a bank, takes this warranty for a fee).

The process can be bureaucratic and painful, especially when the financing bank only Dabble in SBA loans. It is recommended to work a source, based on this option and the system knows the inside and outside.

All in all, the SBA offers some of the best commercial mortgage options for entrepreneurs and should be the last man, no matter how weak capital markets. The key in dealing with the SBA is to know who the best sources are and not assume that all SBA programs and processes are the same.

Jeff Rauth is President of Commercial Finance Advisors, Inc. of Birmingham, Michigan. He specializes in commercial real estate loans between $ 400,000 - $ 5,000,000. Offers unique loan programs such as second mortgages, commercial 30 years fixed and 90% non SBA financing, Commercial Equity Lines. 248 885-8797 or on commercial mortgage loans or loan calculator